Two Farm-Bill Programs Contributing to Renewable Power

The U.S. Department of Agriculture announced $13 million in loans and grants for 233 renewable energy projects in 38 states under the Rural Energy for America Program (REAP).

The loan guarantees and grants can be used for renewable energy systems, energy efficiency improvements, feasibility studies and energy audits.

Terrydale Farms, Inc., in Charleston, Ill., was selected to receive a $20,000 grant to replace a 25-year-old grain dryer that uses a labor-intensive process that often results in under- or over-dried grain. The replacement dryer will use technology that automatically adjusts the burner temperature to produce evenly dried grain in a shorter period of time. The new system is expected to reduce energy consumption by nearly 37% annually – or 125 million BTUs – and lower Terrydale Farms’ annual energy bill by more than $8,500.

In Story City, Iowa, Milford Wind Energy, LLC, has been selected to receive a $1.8 million guaranteed loan and a $500,000 grant to build a 900 kilowatt wind turbine for energy generation. When complete, the turbine is expected to produce nearly 3.3 million kilowatts of electricity annually and generate more than $200,000 in electricity that will be sold to the local utility company. Construction of the turbine is expected to be completed next year.

These funds are not part of the American Recovery and Reinvestment Act. They are part of the REAP program reauthorized under the 2008 Farm Bill.

REAP funding has contributed to renewable energy production for a number of years. For example, in 2003, USDA Rural Development approved a $300,000 renewable energy grant to Lincolnland Agri-Energy, LLC., in Palestine, Ill. The 453-farmer cooperative operates a livestock feed production plant and a 49-million-gallon-per-year ethanol plant. The grant enabled the cooperative to by a $1.4 million thermal oxidizer to control plant emissions. This critical piece of equipment removes 75% of the emissions from the dryer exhaust without reducing plant performance. The oxidizer has another benefit: the heat it produces is captured in a steam recovery system and turned into energy.

For more information on the REAP program, visit the link below. 

FSA Begins Biomass Crop Assistance Program

In a separate announcedment the Department of Agriculture announced that USDA’s Farm Service Agency (FSA) made the first matching payment under the new Biomass Crop Assistance Program (BCAP). Show Me Energy Cooperative of Missouri was the first biomass conversion facility that became qualified under BCAP, another 2008 Farm Bill Program, and less than a month later, was paying producers for biomass materials that FSA matched with BCAP collection, harvest, storage and transportation (CHST) program funds.

According to Show Me Energy Cooperative CEO Kurt Herman, "Our plant produces fuel pellets from agricultural waste products, but could expand to produce cellulosic liquid fuels."

Herman also says pellets produced by Show Me Energy are used to heat houses and livestock facilities. Kansas Power & Light Company’s Sibley plant is testing pellets to determine if the biomass fuel could supplement coal for generating electricity.

Action on BCAP stems from President Barack Obama’s directive issued May 5, 2009, to Secretary Tom Vilsack to aggressively accelerate the investment in and production of biofuels.

The BCAP program encourages biomass conversion facilities to sign agreements with FSA. Once signed up, FSA confirms qualifications and assigns facilities identification numbers. Producers who sell eligible materials to qualified biomass conversion facilities can then apply for FSA payments that match the amount received from the facility. The payments are authorized under the CHST component of BCAP.

For example, if a qualified biomass conversion facility pays a producer $30 per dry ton for biomass, the material owner or producer would be eligible for a matching payment of $30 per dry ton from FSA. Eligible material owners or producers, who market eligible material to a qualified biomass conversion facility, may apply for the matching CHST payment at their FSA county office. An application must be submitted before the eligible material is sold and delivered to a qualified biomass conversion facility.

Show Me Energy submitted its agreement to the Missouri FSA State Office on Aug. 6, 2009. The firm has over 500 biomass producers supplying materials such as switchgrass, straw, corn stover, sawdust, woodchips and other biomass materials.

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